Silver led a sharp correction in the commodities market on Thursday, falling 13 per cent.

Gold and platinum also saw sharp reversals after hitting new long-term peaks in morning trade.

Gold bullion initially climbed to $645.75 an ounce, its highest since November 1980, and silver reached $14.68, a 23-year peak. Platinum hit an all-time high of $1,127/1,131.

But gold dropped as low as $608.50 before ending at $617.50/8.30, down $16.20, or 2.6 per cent.

Silver slumped to $12.61, before ending at $12.75/12.95, $1.95 lower, more than 13 per cent.

Platinum ended at $1,098/$1,106, down $19.

“There are rumours credit will be tightened in China after the strong economic growth in the first quarter,” Robin Bahr of UBS said. In April 2004 and 2005 there were “China shocks” on fears of a slowdown, he added. He also mentioned weaker oil easing inflation pressures and a stronger dollar as possible factors.

“It’s not a turning point though, far from it,” Jim Lennon of Macquarie said.

Nickel hit a record high of $18,950 on Thursday, with improving fundamentals in the stainless steel market, and reduced availability of the metal seen as partly behind the strength.

It ended at $18,452.50, up $105.

Copper fell $94, or 1.5 per cent, to $6,296.50. The Mexican government said the 4-week strike by Grupo Mexico workers at La Caridad mine was illegal and the company said it had bought copper and zinc concentrate from South America to feed smelters.

Zinc slipped from its record high of $3,195 on Wednesday to $3,077.5.

Oil was also hit by profit-taking, but earlier hit new highs after a bomb attack in Nigeria raised concerns over supplies from the country of the light sweet crude preferred for the production of gasoline.

This came on top of a sharp drop in US gasoline stocks, announced on Wednesday, and concerns over Iranian output.

May delivery Nymex West Texas Intermediate hit $72.49 a barrel while the June contract - which becomes the front month on Friday - peaked at $74.48 and Brent hit $74.22.

Nearly a quarter of Nigeria’s output, some 550,000 barrels per day, has been shut for two months due to militant attacks.

After the car bomb at an army barracks, the Movement for the Emancipation of the Niger Delta said they would carry out similar attacks on oil industry targets and individuals.

At midday in New York May Nymex was 90 cents lower at $71.25, June was 97 cents weaker at $73.15 and June Brent was down 97 cents at $72.76.

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